Defence attacks 'mess' of a system

Walsh trial resumes after seven-week break

Defence attorney Vernon French repeatedly pounded at the shambolic nature of financial controls at the House of Assembly in provincial court Thursday, calling their administration "negligent, slack, and a dereliction of duty."

French is representing former cabinet minister and MHA Jim Walsh.

Walsh is facing fraud charges for making excess claims totalling $159,316 from his taxpayer-funded constituency allowance between 1998 and 2004.

Former Newfoundland and Labrador Liberal cabinet minister Jim Walsh was back in court Thursday for the continuation of his trial on fraud charges related to the June 2006 House of Assembly constituency allowance spending scandal. Photo by Gary Hebbard/T

Defence attorney Vernon French repeatedly pounded at the shambolic nature of financial controls at the House of Assembly in provincial court Thursday, calling their administration "negligent, slack, and a dereliction of duty."

French is representing former cabinet minister and MHA Jim Walsh.

Walsh is facing fraud charges for making excess claims totalling $159,316 from his taxpayer-funded constituency allowance between 1998 and 2004.

His trial resumed at provincial court Thursday after a seven-week break.

French spent the entire day cross-examining Harvey Hodder, who served as House Speaker from 2003 to 2007.

The day was punctuated by several testy exchanges between the two.

Hodder testified that he attempted to impose tighter controls on House spending after taking over the Speaker's role in the fall of 2003.

But Hodder was forced by French to defend his decision to allow misleading information about MHA spending to be tabled in the legislature.

The defence lawyer's questions highlighted the lack of written instructions given to MHAs about the rules governing their constituency allowances and the role of the "all-powerful" Internal Economy Commission, or IEC, in making decisions.

French broached the $2,875 secret bonus paid to all but two MHAs in 2004, when Hodder was Speaker.

The Speaker chaired the IEC.

The IEC approved the payments.

Those payments remained concealed from the public until years later, when the auditor general uncovered them.

The public minutes of the IEC - tabled in the legislature, after being approved by Hodder - were vague and did not reference the amount of the clandestine bonus.

Hodder stressed that the publicly released minutes were not meant to mislead taxpayers.

But he acknowledged they didn't provide the full information, either.

French pressed Hodder on whether he fulfilled his responsibility under the law at the time, which required that the public be made aware of IEC spending decisions.

Hodder replied that he was not conscious of the precise wording of the act governing the IEC.

French shot back, "So you weren't knowledgeable in your job, is that what you're telling me?"

After some back and forth, Hodder replied, "I did not knowingly present it that way."

Hodder said he checked with former clerk of the legislature John Noel, whose advice he followed on how to report the $2,875 bonus payment.

The former Speaker also testified he was unaware of a secret second set of minutes - disclosed by Chief Justice Derek Green - that provided more information on IEC decisions.

Hodder said Noel reassured him on several occasions when he raised issues about how the legislature handled its finances.

The bureaucrat who oversaw constituency allowances for MHAs, Bill Murray, is also facing charges in the spending scandal.

Noel and Murray are both expected to testify soon in the Walsh case.

Hodder also noted MHAs from both sides of the aisle threw "significant obstacles" in his way when he continued efforts to tighten spending controls.

"There was, in hindsight, a sense of entitlement that had perhaps gone too far," the former Speaker testified.

French painted a picture of a system that allowed the IEC to move money around from various accounts with no public disclosure and little paperwork to explain any transactions.

Former Newfoundland and Labrador Liberal cabinet minister Jim Walsh was back in court Thursday for the continuation of his trial on fraud charges related to the June 2006 House of Assembly constituency allowance spending scandal. Photo by Gary Hebbard/T